The pound soared to a high of 1.3255 after it retested the 1.31-support zone. Whether this upside break proves to be sustained remains to be seen but as soon as we see prices above 1.3270 chances are in favor of further upside momentum. A next resistance is seen at 1.3315 followed by 1.3350. If the 1.3260-level, however, holds we anticipate upcoming bearish momentum, driving the pound back towards 1.3170/50.
Our daily signal entry long at 1.3175 has already proved successful.
The pound strengthened after the U.K. GDP report underpins the market’s expectation of a Bank of England interest rate hike next week.
The EUR/USD is still consolidating within a narrow trading range as it waits for the ECB announcement to encourage volatility. Tomorrow’s ECB announcement is expected to bring a cut of the central bank’s monthly purchases to EUR30B but there is speculation that ECB policy makers may favor a dovish taper in the effort of keeping the euro relatively weak. Traders should prepare for more volatile swings now ahead of tomorrow’s highly anticipated event. However, with no new drivers we still expect the EUR/USD to fluctuate between 1.1850 and 1.17.
From the U.S. we have Durable Goods Orders scheduled for release at 12:30 UTC.
Here are our daily signal alerts:
EUR/USD
Long at 1.1810 SL 25 TP 20, 45
Short at 1.1740 SL 25 TP 15, 40
GBP/USD
Long at 1.3175 SL 25 TP 20-30
Short at 1.3110 SL 25 TP 20, 70
We wish you good trades and many pips!
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